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Thursday, January 3, 2019

Labor, Capital, and Alienation

Many people think
that replacement of human labor by capital and the alienation and social
disintegration that results is a new thing.It is not.Economic and social
alienation due to advancing technologies or changing economies has been around
since the dawn of time.It is just that
the rate at which change occurs started accelerating about five hundred years
ago.For this, two factors are
responsible.

The first factor
leading to economic and social alienation was that ownership of land became
increasingly concentrated.Reversing the
trend of centuries, greater numbers of the people who worked the land did not
have a direct share in the rewards of production.

The Man for All Seasons

Further, people
became redundant in critical industries.Growing demand for fiber, for example, meant that especially in the
British Isles, people were cleared off land they had in some cases inhabited
for generations to make way for sheep to increase wool production,.As Saint Thomas More (1478-1535) had his
narrator comment in Utopia, his
satire on Tudor England,

“Sheep,” I told him. “Those placid creatures, which used to require
so little food, have now apparently developed a raging appetite, and turned
into man-eaters.Fields, houses, towns,
everything goes down their throats.To
put it more plainly, in those parts of the kingdom where the finest, and so the
most expensive wool is produced, the nobles and gentlemen, not to mention
several saintly abbots, have grown dissatisfied with the income that their
predecessors got out of their estates.They’re no longer content to lead lazy, comfortable lives, which do no
good to society — they must actively do it harm, by enclosing all the land they
can for pasture, and leaving none for cultivation.They’re even tearing down houses and
demolishing whole towns — except, of course, for the churches, which they
preserve for use as sheepfolds.As if
they didn’t waste enough of your soil already on their coverts and
game-preserves, these kind souls have started destroying all traces of human
habitation, and turning every scrap of farmland into a wilderness.” (Thomas
More, Utopia.London: Penguin Books, 1978, 46-47.)

Understanding
“capital” as all non-human factors of production, by the end of the Middle Ages
two things were becoming clear.Not only
was ownership of capital becoming concentrated in fewer and fewer hands, but
human labor was decreasing in value relative to capital as a factor of
production.

The sheeps in the field, not the ships in the harbor.

Again using wool
production as an example, agriculture in a low-tech economy is labor
intensive.Grazing not only requires
much less labor, but yields greater returns and a higher profit margin. (See Peter J. Bowden, The Wool Trade in Tudor and Stuart England.London: Frank Cass & Co., Ltd., 1971;
Derek Hurst, Sheep in the Cotswolds: The
Medieval Wool Trade.Stroud,
Gloucestershire: Tempus Publishing, Ltd., 2005; Eileen Power, The Wool Trade in English Medieval History.Oxford, UK: Oxford University Press, 1941;
John H. Munro, Wool, Cloth, and Gold: The
Struggle for Bullion in Anglo-Burgundian Trade 1340-1478.Toronto, Quebec: University of Toronto Press,
1972.)

And that was the
second factor driving a wedge between ordinary people and full participation in
society as well as developing more fully as human persons.With technical innovation and expansion of
commerce and industry, there were more ways of making a living than before.

A growing gap between rich and poor in both degree and kind.

As ownership of
capital became more concentrated, however, participation through ownership in
the new ways of being productive, useful and beneficial in themselves, became
restricted to fewer and fewer people.Rich and poor became increasingly divided not merely by the amount of
wealth they possessed, but by the ownership of the kinds and quality of wealth
to which they had access as well as the means of producing it.Where the rich owned both labor and capital,
the poor owned only their labor — and labor was decreasing in value relative to
capital as an input to production.

With the
development of a discrete science of economics (originally termed “political
arithmetic”) many people began blaming the greed and rapacity of the rich for
hearkening to artificial laws of economics and replacing human labor with
non-human capital.They failed to
realize that “the iron laws of economics” such as supply and demand, and
efficiency are not a human invention based on impersonal urges of materialism
and greed.They are instead applications
of the absolutes of human nature itself.

It is human
nature to select the most efficient alternative in any endeavor.This is what drives the impulse to make tools
such as capital instruments to do a task better and less expensively than labor
in time, effort, and other resources.

Can't we all just get along?

Insisting on
producing marketable goods and services using less efficient modes of
production is contrary to human nature.Anyone who does so soon discovers that competition from others who are
more efficient — and thus less expensive — in producing goods and services of
equal or greater quality and supplies them at lower prices will drive those who
are less efficient out of business.This
is not an inhuman process, but one that is quintessentially human.

What the Catholic Church condemns is not
competition per se, but competition
carried to extremes.Competition is a
positive good.Like all virtues,
however, competition can easily become a vice when pursued as an end in and of
itself with no reference to the common good.

But if this process is inevitable and
consistent with human nature, is it even possible to correct it?

Kelso: Buy the machine!

Taking the institutional environment as a
given and assuming that they way things have always been done is the only way
they can be done, the answer is no.If,
however, we examine more closely what is going on, the answer becomes obvious.As Louis O. Kelso said in a 1964 article in
Life magazine, “If the Machine Wants Our Job, Let’s Buy It.”

This sounds revolutionary to modern ears that
have from birth had dinned in them the mantra of “Jobs-Jobs-Jobs” as the only
way to gain income.Going back only a
few years, however, and we find that people were saying the same thing as Kelso
as the way to resolve the conflict between owners of labor and owners of
capital.As Pope Leo XIII noted in his
landmark 1891 encyclical, Rerum Novarum,

If a workman's wages be sufficient to enable him comfortably to
support himself, his wife, and his children, he will find it easy, if he be a
sensible man, to practice thrift, and he will not fail, by cutting down
expenses, to put by some little savings and thus secure a modest source of
income. Nature itself would urge him to this. We have seen that this great
labor question cannot be solved save by assuming as a principle that private
ownership must be held sacred and inviolable. The law, therefore, should favor
ownership, and its policy should be to induce as many as possible of the people
to become owners.(Rerum Novarum, § 46.)